Brain Drain and External Imbalances in Sub-Saharan Africa

Dramane Coulibaly and Blaise Gnimassoun

Working Papers from African Economic Research Consortium

Abstract: The persistent nature of external deficits in sub-Saharan Africa (SSA) is a major concern. This paper examines the extent to which migration from SSA to OECD countries affects the dynamics of external balances in SSA countries. Based on panel regressions and gravity-based 2SLS estimation strategies on data from 46 SSA countries over the period 1990-2014, we establish that emigration a- particularly of highly-skilled people a- contributes to the persistence of external deficits in SSA countries. While emigration globally has a negative impact on the current account, only high-skilled emigration has a significant and robust impact. These findings are corroborated by the fact that highly-skilled individuals emigrate with their saving potential as suggested by t h e life-cycle theory. In addition, while remittances to home countries can help to compensate this negative effect of brain drain, our results show that highly-skilled emigrant's contribution to remittances is less important compared to that of low-skilled emigrants. Therefore, policy makers in SSA countries should implement policies to attract more remittances, particularly from highly-skilled emigrants, in order to reduce their external imbalances or external financing needs.

Date: 2021-10-04
Note: African Economic Research Consortium
References: Add references at CitEc
Citations:

Downloads: (external link)
https://publication.aercafricalibrary.org/handle/123456789/2829 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aer:wpaper:82dc1bc6-662d-46dd-be2f-9b47d5634752

Access Statistics for this paper

More papers in Working Papers from African Economic Research Consortium Contact information at EDIRC.
Bibliographic data for series maintained by Daniel Njiru ().